Deutsche Bank CEO Seth Waugh Criticizes PGA Tour's Rising Purses

Waugh (c) Says There's Pressure On PGA Tour
To Reduce The Purses It Demands Of Sponsors

Deutsche Bank Americas CEO Seth Waugh said that there is "pressure on the PGA Tour to reduce the purses it will demand sponsors to fund in the coming years or at least hold steady on them," according to Randall Mell of GOLF CHANNEL. Deutsche Bank's four-year deal to title sponsor the second event of the FedExCup playoffs expires after next season, and the company owns an option for two more years. But Waugh after Sunday's third round of the Deutsche Bank Championship "sounded like a man who wants to renegotiate his two-year option, or negotiate better terms in a longer extension." He said that he "didn’t mean to negotiate through the media, but in openly answering questions about the nature of title sponsorship in these tough economic times, he laid out what he and other companies will be thinking as the PGA Tour seeks to extend existing contracts." The event's purse jumped from $7M to $7.5M this season, and Waugh said, "I would not have raised purses last fall, not because they couldn’t, but because it was the wrong message. Every model of every business is under pressure, and you have to create more value for people, either by doing it cheaper, or by creating more value. ... They have to think their way through that, having people feel good about the experience, as opposed to being dictated as to what it is.” Waugh noted that six months ago he "wouldn't have been optimistic his company would pick up its two-year option or negotiate an extension, but he is now." Mell noted Deutsche Bank's costs are "scheduled to go up again under terms of the two-year option," and Waugh asserted that the Tour "has to re-think what it's selling" (GOLFCHANNEL.com, 9/7).

NO THOUGHTS OF REDUCING BMW PURSE: BMW North America President Jim O'Donnell appeared on CNBC this morning from Cog Hill Golf & Country Club in Lemont, Illinois, in advance of tomorrow's start of the PGA Tour BMW Championship. The purse for the event is $7.5M, and CNBC's Phil LeBeau said there has been a “fair amount of talk about the purses becoming too extravagant, especially in a down economy.” LeBeau: “Have you ever thought to yourself, 'Maybe we need to rein this in? Maybe this is not the best expenditure of our money.'" O'Donnell: "No, not really because the other side of the coin is we will generate something like $3.3(M) -- at least that's what we did last year -- for charity” ("Squawk Box," CNBC, 9/9).

IT STARTS FROM THE TOP: The GLOBE & MAIL's Bruce Dowbiggin noted with the PGA Tour "struggling every time Tiger Woods skips a tournament and both the LPGA Tour and Champions Tour in serious financial straits, some wonder if limited-field formats of the top stars would work best to draw eyeballs to the tube." One source said that the idea is "gaining popularity." The "Tiger-effect" has created a "de facto two-tier tour." With TV cameras "following almost every shot by Woods, there's simply not that much time in a broadcast for other players," and when Woods and Phil Mickelson are not playing, "viewership drops." Dowbiggin: "So while they'd never say as much, TV networks would likely embrace stars-only fields" (GLOBESPORTS.com, 9/7).